Cigarettes and lots of debt: 7 things in Budget 2014 that you may have missed

We’ve read the Budget documents so you don’t have to…

WHEN THE GOVERNMENT lays out its taxation and spending plans for the year the devil is almost always in the detail.

With overall spending of €64.9 billion planned for next year there’s a lot of detail to wade through.

So we’ve had another look at the expenditure report and the main Budget document – both available here – and plucked out a few things you may have missed…

1. Newsagents and shops will have to pay more to sell cigarettes

James Reilly’s war on tobacco continues with plans to raise €5 million from an increase in the charge for licensing tobacco retailers.

Currently retailers pay a one-off fee of €50 and register with the Health Service Executive in order to sell tobacco products. The government wants to increase this in 2014 as per recommendations in the ‘Tobacco Free Ireland’ report published earlier this year.

But we don’t know yet how much exactly retailers will face having to pay. There are around 10,750 currently registered and licensed to sell tobacco. If we were to divide this into €5 million it works out at about €465 per retailer but the new fee would be dependent on the scale of the retail operation so some will pay more than others.

It’s also intended that money from this measure will be ring-fenced for spending by the Department of Health.

2. Unemployment will still be high when this government leaves office

The Department of Finance produced plenty of figures and statistics yesterday and in among them is a projection that unemployment will still be very high by 2016 – the year this government is scheduled to leave office barring an unexpected general election.

That comes as no great surprise but it underlines the extent of the crisis over the last five years that by 2016 we’ll still have an unemployment rate of 11.4 per cent, according to government projections.

3. And so will our overall debt

Finance Minister Michael Noonan is a strong believer in the idea that when Ireland’s debt to GDP ratio (the ratio of a nation’s debt and its gross domestic product i.e. the value of all its goods and services) begins to fall there will be boost in investor confidence in Ireland.

Our debt to GDP ratio this year will peak at a whopping 124 per cent and though it is predicted to fall to 114.6 per cent in 2016 our overall debt will have increased to €211.6 billion by then. It’s €205.9 billion this year.

The government is still going to need over 14 per cent of its revenues to service this debt. While high the Department of Finance has pointed out that it is lower than in the 1980s and ultimately “prudent budgetary management” will allow our level of debt to decline.

4. The government’s going to create a ‘bank’ of nurses

This is a proposal aimed at saving €12 million by reducing the State heath service’s reliance on agency nurses. The HSE pays millions to agencies every year for nurses when, some argue, it would be better off just hiring more on a full time basis but there’s a moratorium on public sector recruiting.

Now the Department wants to develop a ‘Nurse Bank’ which, as James Reilly explained today, ”means we can have a group of nurses on our books that we can call on that we can use outside of agency nurses.”

There is scant detail about how this will work but it will be done in conjunction with the Department of Public Expenditure and Reform and the HSE.

5. Cutting the cost of courts and prisons

The Department of Justice wants to cut the cost of running prisons and courts in Ireland. Both have already undergone significant spending reductions in recent years and it will be the same again next year.

In the courts they want to make greater use of technology and “other resources” and it’s all about the keyword “efficiencies”. All of this will be aimed at saving €1 million.

One million euro is also the savings target in the Prisons Service with reductions in “administrative cost”, “fleet management expenses”, and, interestingly, savings in the provision of healthcare in our prisons from the use of generic drugs.

6. The Department of Jobs wants to make even more pay savings

Savings in the public sector payroll are already ensured through the Haddington Road Agreement but Richard Bruton’s department is targetting pay savings “over and above” those already agreed. How much? €6 million.

7. The Gathering 2014? Nope

Perhaps inevitably the Department of Transport and Tourism isn’t going to be promoting Ireland internationally as much as it has in 2013 – the year of The Gathering.

Nearly €13 million in savings will be targeted with a reduction in the allocation for tourism programmes.

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